Centre’s intervention sought to save RINL from raw material crisis
Steel Executives’ Association urges Centre to direct SAIL to respond to the EoI to fund working capital and provide in raw material in exchange of finished products
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• RINL purchases iron ore from NMDC at market price
• SAIL imports coking coal at Rs 1,000 per tonne
• RINL’s production cost is Rs 7,000 more per tonne over steel plants in India
• SAIL does not have a production unit in South India for long products
Visakhapatnam: In yet another attempt to save Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, the executives’ body of the organisation has urged the Union Government to direct SAIL to respond to the EoI to fund working capital and provide in raw material in exchange of finished products.
Steel Executives’ Association (SEA), the recognised body of RINL officers, in a representation to Union Steel and Civil Aviation Minister Jyotiraditya Scindia stated that Visakhapatnam Steel Plant is the lone shore-based integrated steel plant with Visakhapatnam and Gangavaram ports in a vicinity of 25 km. RINL-VSP expanded its capacity from three million tonnes to 7.3 million tonnes as per the National Steel Policy.
“Unfortunately RINL could not achieve its rated capacity due to the financial crisis. RINL has not had captive iron and coal mines since inception. As a result, our production cost is Rs 6,000 to Rs 7,000 more per tonne over steel plants in India. SAIL is having excessive iron ore fines in its mines. RINL is purchasing iron ore from NMDC at market price. On account of iron ore only RINL is bearing Rs 4,000 to Rs 5,000 extra for producing one tonne of crude steel,” SEA President Katam SS Chandra Rao and general secretary KVD Prasad said.
In the representation, they pointed out that RINL is associated with Gangavaram Port to get imported coking coal through conveyors as both are situated side by side. At the same time SAIL is also importing coking coal from Gangavaram Port and transporting by rail which is costing around Rs 1,000 per tonne. SAIL does not have a production unit in South India for long products and has to send from the northern region to its southern marketing yards. In the recent past SAIL got good export orders in structural and intermediate products. All these can be produced at VSP and exported through two major ports nearby the plant.
RINL issued a notice for EOI on March 27 seeking proposals for working capital funding and raw material supply in exchange of finished steel products as a barter deal. “Hence, if SAIL responds to EOI and gives an offer, it will be mutually beneficial in the larger interest of the nation,” the SEA office-bearers said.
Even in difficult times, RINL registered around Rs 23,000 crore turnover in FY 2022-23, they said adding with only two blast furnaces in operation as third one was shut down in January, 2022 due to lack of coking coal and working capital, the strategic partnership between SAIL and RINL, which are under the same ministry will further strengthen ‘Atma Nirbhar Bharat’ Mission, a senior official said.
